loewe AG, Kronach

• Leading premium brand in the European consumer electronics market
• Sales and earnings in the first quarter of 2011 lower than in the previous year
• "Fast Forward" future strategy program intensified
• Moderate sales growth expected for 2011 as a whole

Kronach/Munich. – "The international markets offer great potential for growth in the premium segment. As the leading provider of individualizable home entertainment systems with a growing audio segment, Loewe has become one of the leading premium brands in the European consumer electronics market. We will dedicate ourselves to further strengthening this potential of the Loewe brand, building on Loewe’s solid equity base," commented Oliver Seidl, Loewe CEO, during the company's Annual Shareholders' Meeting in Munich.

"It is the special blend of technology and emotion that makes Loewe unique and this is a good prerequisite for a successful future," continued Seidl. The "Fast Forward" future strategy program will reinforce Loewe's ability to respond rapidly, flexibly and with an innovative competitive edge. To that end, specific measures were initiated in the areas of products, distribution, internal organization and processes and also in cost cutting.

However, the company's sales and earnings figures in the early months of 2011 are still below those of the previous year. Accordingly, Loewe was unable to escape the overall negative trend in the market. For 2011 as a whole, Loewe nonetheless expects moderate growth in sales and positive EBIT. At EUR 61.5 million, sales of the Loewe Group in the first three months of the current year were 16% lower than the 2010 figure of EUR 73.4 million. The decreased sales and production volume caused Loewe to post negative EBIT of EUR 2.9 million in the first quarter of 2011 after positive EBIT of EUR 0.8 million in the same period in 2010.

At EUR 307.3 million, sales of the Loewe Group in fiscal year 2010 were, as reported, 5% lower than the previous year's figure of EUR 324.0 million. While sales in Germany, Loewe's most important market, were 7% lower than in 2010 at EUR 179.7 million, export sales decreased by only 3% to EUR 127.6 million. The company succeeded in increasing its percentage of sales of large-screen TVs from 58% in the previous year to 66%, thereby expanding the premium position. The decreased sales and production volume caused Loewe to post negative EBIT of EUR 5.3 million in 2010 after positive EBIT of EUR 13.5 million in the preceding year.

Loewe will continue to push ahead with the "Fast Forward" program in fiscal 2011 to safeguard its future viability. "After reorganizing product development, we will further optimize processes to advance the current product offensive. We will bring new products to the market faster and target our product line to customers in the European premium market more closely," said Seidl. In line with this, Loewe launched the Individual Compose product as the first of many new 3D televisions a few weeks ago. Loewe will continue to build up its leading position in the convergence of the Internet and television. Furthermore, Loewe will add innovative speaker and multi-room solutions to its home entertainment systems line in 2011, the area where the company has continuously and vigorously expanded its market share in the last few years.

In the current fiscal year, Loewe will further optimize the premium-based marketing of the Company's top quality products within and outside of Germany, using, amongst other measures, even closer cooperation with qualified retailers. Additional focus of marketing and sales activities will be on expanding qualitative and quantitative distribution. Cooperative agreements with the retail chains FNAC in France and John Lewis in the United Kingdom as well as a cooperative agreement with Euronics in Italy were announced in recent weeks. The international sales organization as a whole is to be strengthened further and dovetailed more systematically to the requirements of the markets and customers.

"Of course, our sales and earnings will still be burdened in the early months of 2011; however, we do expect moderate growth in sales and positive EBIT for the current fiscal year of 2011," said Seidl.

Loewe has created the conditions for this by making a long-term commitment to the "Fast Forward" future strategy program. The market also offers excellent opportunities. In addition to the continued high replacement demand and the increasing ownership of more than one LCD TV in Europe, new technologies like the convergence of the Internet and TV, 3D television, home networking as well as more individual operating concepts offer Loewe attractive growth opportunities that will last beyond the current fiscal year. Moreover, the Company’s sound capital structure and extensive financing agreements make it well positioned for the future.

The Loewe Annual Shareholders' Meeting elected a new Supervisory Board this year. The persons elected are:

• Dr. Axel Berger, Vice-President of the German Finance Reporting Enforcement Panel, Rösrath,
• Dr. Rainer Hecker, former Chairman of the Executive Board of Loewe AG, Mannheim,
• Dr. Gerhard Heinrich, Partner and Managing Director of Heinrich & Cie. Unternehmensberatung, Frankfurt,
• Dr. Sönke Mehrgardt, Managing Partner with MVP Munich Venture Partners, Deisenhofen,
• Dr. Michael Witzel, Attorney, Munich.

Dr. Dorothee Ritz, Member of Management of Microsoft Deutschland GmbH with responsibility for Consumer & Online, Pullach, has been elected to replace Professor Dr. Mark Wössner, who is retiring.